Physicians Harbor Labor Day Blues

It's no surprise that Baby Boomer and older "Silent Generation" physicians plan to delay their retirement. What is surprising is that Generation Xers are also thinking about it, even though retirement is many years away, according to Jackson &Coker, an Alpharetta, GA physician placement firm

A Jackson & Coker August survey  shows more than 52% of physicians who had planned to retire within the next six years have put those plans on hold, citing glum diagnoses of their economic condition.

Physicians cited declining property values, reduced retirement savings, and children's college funds as among the major reasons why they will likely continue working, as well as their loss of confidence in Social Security and Medicare. At least 70% said the loss of their personal savings and uncertainty in improving their financial condition was a main reason for delaying retirement.

"It seems like doctors are caught between recession and reform," says Sheri Sorrell, marketing manager at Jackson & Coker. "We know a lot of doctors in single practices are feeling like they have to sell their practices to a hospital because they can't afford the overhead."

Jackson & Coker did not ask the survey participants their age, only their years in practice. "It was a surprise to us that folks quite concerned about delaying their retirement are generally Generation Xers," Sorrell says. "The Baby Boomers are saying they will be doing some part-time work, or able to semi-retire up the road. For the Generation X folks, they are going to have to deal with the effects of healthcare reform."

These are the same Generation Xers who want more hospital-based employers and who don't want crazy working hours. They want a steadier paycheck, and with the economy in upheaval, they are going for Plan-B: Work as long as possible, Sorrell says.

In the survey, physicians cited economic scenarios affecting either their family or medical practices that are impacting their immediate and future plans.

"I had planned to leave the military and enter private practice," says one physician. "The group that I hoped to join was unable to follow through with their offer as two partners had to delay their own retirement due to the recession and the uncertainty created by the healthcare reform legislation. Thus, no position was available to me, so I am still in military practice with a 'wait-and-see' philosophy."

"In a group of 8, we struggled with pay in 2008," says another physician. "There were times we all took no salary. Medicare held up payments. Patients treat us like a bank. Employees have better benefits than we get ourselves. I would quit entirely if I did not have a child in college."

Added a third physician, "The recession has had a dramatic impact on my practice. I practice radiology and while volume has only decreased slightly, reimbursements have diminished and the business of radiology has allowed employers to extract additional work out of some physicians, while letting others go. Salaries have decreased up to 50%."

There certainly is a demand for more doctors. The American Association of Medical College's Center for Workforce Studies estimates a shortage of 124,000-159,000 physicians by 2025.

The association estimates that potential healthcare reforms, such as universal health coverage, will add to overall demand for doctors and increase the projected shortfall by 25%.

But although there may be more physicians who stay in practice by postponing retirement, they probably won't be enough to offset the impact of anticipated healthcare needs, says Edward McEachern, vice president of marketing for Jackson & Coker.

"We have seen a pent-up retirement demand, if you will," McEachern says. "The doctors are working longer and longer, but we're fearful of when the 401Ks do turn around and the economy turns around, you may see a huge percentage of doctors who wanted to retire and couldn't, and then decide to do so," he adds. "That will add to the severe shortage of physicians in our healthcare system."

There is some good news, however. First year medical school enrollment in 2014-15 is projected to reach 23% above 2002-2003. Current projects indicate that medical school enrollment is on track to reach a 30% targeted increase by 2018, according to the Association of American Medical Colleges.

By then, Generation Xers may feel a bit more comfortable about retirement.